The plan builds on the company’s existing Claim 5 strategy and comes with a sharper focus on efficiency in brand development, distribution, and operations.
Claim 5 was launched in August 2021 with the ambition to double Hugo Boss’ sales to €4bn ($4.6bn) by 2025. Thanks to the strategy’s success and stronger-than-expected momentum, the fashion house surpassed this €4bn target two years ahead of schedule, in fiscal year 2023. As a result, in June 2023, Hugo Boss raised its 2025 sales ambition to €5bn.
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Hugo Boss CEO Daniel Grieder said: “Following the successes of recent years, we are now deliberately taking a step back to prepare for tomorrow’s growth. Our focus in the coming years will be on the ongoing optimisation in the areas of brand, distribution, and operations with the clear ambition to transform them from great to excellent.”
In 2026, Hugo Boss intends to implement a realignment phase aimed at optimising business processes, refining product assortments, and streamlining its distribution network.
The company also stated that this period is expected to accelerate free cash flow generation and enhance operational and financial stability.
Reporting a compound annual growth rate of 22% between 2020 and 2024 for both Boss and Hugo brands, the German fashion and lifestyle house added that structural investments have contributed to building a platform for future expansion.
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By GlobalDataClaim 5 Touchdown course through 2028
The Claim 5 strategy outlines that brand initiatives will concentrate on further strengthening the relevance of Boss and Hugo and reinforcing customer loyalty.
For Boss Menswear, the business will continue to utilise its established positioning, while Boss Womenswear will focus on a core selection of products targeted at female consumers.
Hugo will refine its identity with updated brand positioning and a broader range of accessible products. The group is introducing a new organisational model with separate teams for menswear and womenswear to increase synergies across both brands.
Marketing expenditure is planned at nearly 7% of group sales, with priority given to high-return activities such as partnerships like Beckham x Boss and product-led campaigns.
The distribution strategy involves optimising Hugo Boss’ store portfolio to support customer experience, sales productivity, and retail efficiency.
In wholesale channels, Hugo Boss aims to strengthen strategic partnerships, introduce more selective assortments, and grow its franchise operations.
The designer fashion company also seeks further growth in digital channels by improving brand presentation and customer engagement across platforms.
Regionally, Hugo Boss intends to consolidate its position in the US and China while leveraging its robust footprint in Europe for additional market share gains.
Operationally, Hugo Boss will prioritise supply chain improvements by focusing on sourcing efficiencies such as vendor optimisation, sea freight preference, and reduced lead times.
The company intends to upgrade planning processes using technology and AI to enable faster decision-making.
Claim 5 Touchdown financial ambitions
Financial targets include achieving an earnings before interest and taxes (EBIT) margin of nearly 12% over the medium to long term.
Hugo Boss is aiming for an annual free cash flow of about €300m by 2028, almost three times higher than in recent years, supported by reduced capital expenditure and tighter working capital management.
Inventory is projected to decrease steadily towards 20% of sales by 2028.
The company expects currency-adjusted sales in 2026 to decline by a mid- to high-single-digit percentage due to planned brand and channel realignment, but anticipates a return to growth in 2027 with further acceleration in 2028.
Gross margin improvements are forecast from 2026 onwards due to sourcing efficiencies, price adjustments, and stronger full-price sales.
EBIT is projected between €300m and €350m in 2026, with further profitability increases from 2027.
Hugo Boss chief financial officer and chief operating officer Yves Müller said: “2026 will be a year of consolidation and realignment and an important step toward positioning Hugo Boss for long-term profitable growth. While we expect a temporary decline in sales, we will continue to drive our efficiency agenda along the value chain to safeguard margins and strongly accelerate cash flow generation.”
